TTM free cash flow to firm yield is a measure of how much cash a company generates from its core operations relative to its total value. It is calculated by dividing the trailing 12-month free cash flow to firm by the enterprise value and multiplying by 100. It indicates how much return investors can expect from investing in a company based on its free cash flow to firm. Free cash flow to firm is the cash that a company has left after paying for its operating expenses, capital investments, and taxes, but not interest expenses. Enterprise value is the measure of a company’s total value, including its equity and debt, minus any cash or cash equivalents. The formula for TTM free cash flow to firm yield is:
TTM free cash flow to firm yield = (Trailing 12-month free cash flow to firm / Enterprise value) * 100
Where:
- Trailing 12-month free cash flow to firm is the average free cash flow to firm that a company generated in the past 12 months (TM009,
ttm_free_cash_flow_firm)
- Enterprise value is the measure of a company’s total value, including its equity and debt, minus any cash or cash equivalents (R0075,
enterprise_value)